With a new decade nearly upon us, we decided to reflect on the events of the past 10 years, and the impact they’ve had on the construction industry. In 2013, Help to Buy was a big talking point…
The government’s Help to Buy scheme launched in April 2013, offering homebuyers with a 5% deposit the opportunity to get an interest free loan of up to 20% of the value of a new-build home.
The scheme was announced in then Chancellor of the Exchequer George Osborne’s March 2013 Budget speech, stating that Help to Buy would “support a new generation in realising the dream of home ownership” and describing it as “a dramatic intervention to get our housing market moving”.
The catch was (or indeed still is, as the scheme is still running) that after five years, the homebuyer would need to pay annual interest of 1.75% on the loan, with the rate of interest rising further each year thereafter.
Help to Buy has divided opinion from the beginning, with its opponents suggesting builders are slapping 5% extra on the price of homes bought under the scheme. And with new build properties in England and Wales already tending to command a hefty premium over other properties, some have said Help to Buy users could end up paying 20% more for their homes.
In February 2015, the Independent reported on the views of Libertarian think tanks, who, it said, were among the “most incensed” about the scheme:
“The broad consensus was that Help to Buy would do little or nothing to increase the construction of new homes, and would therefore merely push up home values still further. A policy presented as a way of helping struggling first-time buyers would end up making it harder for them to get on the housing ladder.”
That said, more than 200,000 people have used the scheme since its launch, with many more likely to do so before Help to Buy ends in 2023.
More posts in our ‘Construction Decade in Review’ series
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